IVK Europe issues warning over PVC supply / Margin collapse “dramatic” / Situation to remain difficult until at least mid-2022
The Germany-based industry association of companies producing sheets made of plastics and caoutchouc, Industrieverband Kunststoffbahnen Europe (IVK Europe, Frankfurt; www.ivk-europe.com), has expressed concern over the troubling supply situation in the PVC industry, caused by raw material shortages, continuing price hikes, and the more than 80 force majeure declarations made by producers between January and September 2021 (see Plasteurope.com of 23.09.2021).

The association said the PVC, plasticisers, and additives markets have reached a critical point, one being exacerbated by the lack of imports from North America and Asia (see Plasteurope.com of 12.11.2021 and 11.11.2021). “For member companies, the collapse of margins is dramatic,” says IVK.

With this worsening situation in mind, IVK said it was justified for member companies to pass increased raw material prices on to customers: “Due to this precarious situation, IVK Europe member companies have to extend delivery times, allocate delivery quantities and in some cases even have to reject orders. Member companies have to pass the increased raw material prices to their customers.” The association added that it does not expect any improvements in the situation before the middle or end of 2022.

According to Germany’s ifo Institute, however, raw material shortages in Europe’s largest economy seem to have lessened of late, even though German manufacturers of plastics and rubber goods say they expect supply bottlenecks to continue for almost eight months (see Plasteurope.com of 16.11.2021). Adding fuel to the fire are globally increasing gas and energy prices: European plastics processing industry group Polymer Comply Europe (PCE, Brussels / Belgium; www.polymercomplyeurope.eu) recently warned about the possible detrimental impact of new energy surcharges introduced by resin makers (see Plasteurope.com of 16.11.2021).

According to Germany’s Chemical Industry Association (VCI, Frankfurt; www.vci.de), prices for electricity and gas have increased by four times between October 2020 and October 2021. In September, the association’s chief economist, Henrik Meincke, had said: “The situation is tense. The warehouses are empty. We cannot do more at the moment. The upheavals will still be with us for quite some time.”
17.11.2021 Plasteurope.com [249022-0]
Published on 17.11.2021

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